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Friday, November 3, 2017

Here is an extract from our Elliott Wave Technician November 2017 Investment Newsletter.

As a proxy for Europe we publish our Elliott Wave Analysis of the Spanish Stock Market which reveals a triangle structure spanning nearly 20 years.

Monthly chart of the Spanish Stock Market

Technical analysis of the Spanish Stock Market. Source: Elliott Wave TechnicianA long term boom in the Spanish Stock Market ended in 2000. Since then a large contracting triangle has been evolving which we have labeled as Elliott Wave 'B' marked in blue color on the chart. The initial large decline down from the top in 2000 into 2002 is labelled as wave “A” marked in blue color. Notice that the ultimate 2012 low was more than 70% lower then the Spanish stockmarket's all time high in 2007. A rally out of the 2002 bottom in wave “B” marked in blue color is topping.

The Spanish stock market is now entering a large Elliott Wave 'C' decline. The target of the ‘C’ wave down should be well under the low of 2012 and take multi years to play out. We expect the Spanish real estate market to collapse as well. The implications of collapsing stock- and real estate markets will have dire consequences for the Spanish banking system. Money and banking restrictions are coming, and like in Greece, expect to wait in long lines outside the banks in order to take out a small amount of your own money. We expect civil war like conditions in certain regions like Catalonia as the display of negative social mood plays out during the bear market.

A return to the Peseta and an exit from the European Union is likely in the coming years.

Wednesday, November 2, 2016

The average life expectancy for a fiat currency is around 27 years, Approximately every 30-40 years the monetary system breaks down and needs to be redefined.

The British Pound Sterling also known as the pound (GBP) is so far the most successful reserve currency in the world and is the oldest currency still in use.

Prior to WWI, the United Kingdom had one of the world's strongest economies, holding 40% of the world's overseas investments. However, after the end of the war the country was very indebted and lost the reserve currency status to the US dollar.

See our comparison of the former reserve currencies of the world here.

GBP has been declining for about a decade. The Elliott Wave structure is a large A, B and C correction since 2007 marked in blue colour on the chart above. Wave 'A' down ended in early 2009. A large sidewave correction that we have labeled as wave 'B' ended in the middle of 2014. Since then the GBP has been declining in wave 'C'. GBP declining in wave ‘3’ of 'C' down. The decline will take the British Pound towards parity with the USD in a few years.

Thursday, January 7, 2016

Here is an extract from our Elliott Wave Technician December 2015 Investment Newsletter. We cover all major markets in Asia, which looks interesting in a long term perspective as they are ending larger bear markets.

As a proxy for Asia we publish our Elliott Wave Analysis of the Taiwanese stock market which reveals a triangle structure spanning 20 years.

A complete large contracting triangle which we have labeled as Elliott Wave 'IV'. The Taiwanese stock market is in the beginning of a large Elliott Wave 'V'. We have labeled the rally that started in 2008 as Elliott Wave '1' of 'V'. It is not clear if the correction in wave ‘2’ is complete, so further downside from current levels is possible.

However, the next big move should be a continued long term rise in wave '3' of 'V'.

Monday, August 24, 2015

Copper often leads other markets. That's why the red metal is called Dr. Copper.

Copper continue to follow our forecast to a tee. Here is an updated weekly chart of Copper with the larger Elliott Wave structure:

Source Elliott Wave Technician

As you can see from the long term Elliott Wave structure, copper topped in 2011, and since then, a large decline has been in progress with a target of USD 1 - USD 1.25 area on the chart. We have labeled the end of the wave down as (a) marked with blue colour on the chart.

If Dr. Copper is rigth a large stock market crash will follow the price collapse of Copper.